tv Worldwide Exchange CNBC July 4, 2014 4:00am-6:01am EDT
welcome to "worldwide exchange." i'm karen cho. these are your headlines from around the world. the rally stopped here. european markets opened in the red despite solid gains on wall street which drove the dow above 17,000 for the first time. a profit warning, the austrian bank driving up positions in hungary and romanian. european paxton goes after
amazon. defending the online retail giant's tax affairs. and americans celebrate fourth of july. will scotland be getting its own independence day? celebrate 35 days ahead of the crucial referendum. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> concerns have been expressed regarding the historical low central bank's easing pressure. the bundes bank president says the ecb needs tone sure rates and not kept too low for too long. speaking at the same conference, he said governments across the eurozone should not view the kurnlt environment as an
invitation. the emphasis should be on reforms which promote growth and productivity. and korea isn't the only one concern. president draghi had this to say. >> the exchange rate is a different issue. there, to some extent, there are many factors that influence the exchange rate. and i don't want to dwell on each one of them. the low levels of inflation, extremely low levels of interest rates do have an effect on the interest rate. it was -- if you look at the four months ago, it was higher than it is today. so -- but it's a problem. because as they say, it affects the -- or objective of price stability.
>> across on european markets this morning, now into the trading session. we are looking at some losses for the major indexes stoxx europe 600 most major markets are in negative territory this morning. the stoxx 600 tracking lower by 0.1%. but the individual markets are giving this picture. the cac weaker by 0.1%, tts if it is mib weaker by 0.4%. some of the top corporate stories that we're keeping an eye on for you this morning, we are seeing large moves in the individual stockses. ersta group is down over 13%.
the bank says it now expects a net loss this year 1.4 billion euros. don't forget erste's performance is dragging down some of the austrian stocks. the bank saying its remaining operations are doing well. this is startling because it has been a very strong story for erste in that part of the world. it has banked a lot of its fortunes on the growth story there. elsewhere in the airline space, easyjet taking off this morning. you can see the shares popping nearly 3% currently. the company reported a 10.1% jump in traffic. that means the firm carried 6.1 million passengers last month. let's move on to asian markets. it has been a decent session across the board.
the msci broad index of asia pacific says that japan has reached its highest play level. the individual markets are mostly firm. 24r the chinese stock market trading lower by 0.2%. the japanese stock market respond to go that push we saw in the u.s. dollar. it's finally arrived. many people have been waiting for. hong kong drifting higher, 0.6 of%. don't forget some of the commodity prices that have been patchy in the last 4 hours. on bond markets, this is particular across the board. there is a bit of movement at the short end of the curve in particular. the european mblths here, though, as we saw, mario draghi kept all the measures on the table. that meant we saw some lower
yields across the board this morning. 11.27%. 1.6. the italian market, up 2.8%. foreign exchange markets, the dollar has been one we're keeping track on in the way of that job support. there is some number that crossed 288,000 jobs in the month. down 0.2%. the yen down a similar amount. the aussie is still gaining to the u.s. dollar. don't forget, it has come off some of the peaks, 94 levels that have been on the boards. 171.50. pound under a little bit of pressure, as well. the back of the bumper jobs report, some people are saying it's not enough.
we should have seen a greater jump in the u.s. dollar. >> well, i think that you need to look into the labor markets report. they should improve. there's a lot of change the euphoric within the fed. now, what we have is stronger economic activity. that may meanness yellen is expect expecting the pick up of inflation numbers recently. she wanted to get the confirmation wires of age data. having said that, i think the u.s. economy is escaping the loss. that implies that is well respected in our trading policy. it is time to buy dollar. first you will do that against the lower yielding counter part. you could take those currencies
into account where central banks recently changed, too. now, when you look into -- and i guess that's a very important xamp here. at the start of this year, we expect that should be the weakest currency for this year. and the -- the action of the central bank made it very clear. the transition between growth and inflation. it is deflationary. it's a deflationary environment taking place there. so, again, dollar is long against selective currency. we expect the u.s. dollar strength of venezuela reaching other parts of the currency spectrum. >> if you're looking at the
trade of the u.s. dollar versus a bunch of different crosses of here, is it better to be playing the nordics? even though we've seen extraordinary measures announced in june. the market now has a few doubts as to what is next in the policy talk. >> that is absolutely right. but you have to consider if you just wait for central bankers to say something, you will be always behind the curve. that is actually to establish ourselves. we are on the policy position in place then when the central bankers are talking when they are changing their rate profile as we have seen that in sweden. and the way to do that is you need to auto into private sector debt. when you have a high level of private sector debt, you know it may change the behavior of the participants in that economy. the higher the debt level is, the more the participants may be restricted in economic activity.
that has become very visible in swede.. and what we look into, too, is try to figure out what is the sensitivity of the economy to increase the debt. now, when you're in the early stage of increasing your debt levels and under those circumstances you have high multiplying effects. now in many of these economies with high debt levels, the multiplying effects are declining. and the efficiency of that is declining. that is where the deflationary pressures come on. in some cases like sweden, this reaction comes as a surprise to many. we are looking at debt levels in many ways. and i guess it has to come by now very clear that the financial stability angle is the wrong angle to take. >> hans, we've got plenty more and there's much more to delve into after the ecb meeting yesterday. stay with us.
we have news crossing from the russian president. putin says russia and the u.s. are both responsible for global peace. putin says he hopes to improve relationships with the united states despite some of the differences. so a soothing message coming from putin. but don't forget there's been a bunch of different disputes in the region. the u.s. employers add 288,000 jobs in june while the unemployment rate dipped to 6.1%. that is the lowest level since 2008. and the response sent markets higher in yesterday's trade. the dow hitting 17,000 points
for the first time ever. cnbc's josh lipton sent us this report on the momentous trading day. >> another record day for the markets. the dow closing by 17,000 for the first time. ending the day up 92 points. the s&p rising nearly 11 points, closing at a record high of 1985 and the nasdaq up to 4485. this fuels a big rounds in the job market. the u.s. economy atting 44,000 jobs in june. making it the best stretch of job creation since the 1990s. walgreen's sales rising sharply. the pharmacy chain reported prescription drugs up more than 13% last month. that drove their stocks forward today up 1.3%. and americans are hitting the road for the fourth of july. more than 30 million people in
the u.s. expected to drive more than 50 miles this weekend. aaa saying one gallon of unleaded gasoline costs an average of 3.67, the highest it's been on july fourth since 2008. hans joining us from morgan stanley, very strong prints from the job market had some people saying this is just evidence that the first quarter gdp wages we saw was a one-off weather related event. do you agree? are all systems go now for risk on stateside? >> i certainly agree that the u.s. economy is in much better shape. and the first quarter decline was a trigger to some extent by a substantial adjustment of inventory. it's additional momentum added to the economy. but that is not the main point to make. the main point to make that in the u.s., that in the uk. we have seen private sectors
adjusting the balance sheets. and the banking sector has been recapitalized in the year 2009. and corporates are sitting on huge parts of cash. so you have the situation in the u.s. where the private sector can releverage again. and that, i think, is an economy where inflation could pick up. >> indeed. >> if that is happening, then yes, watch the situation here in the uk to the united states. >> hans, the issue there is the bulls are justified right now, but many people are waiting for earnings to match up to the valuations on stock markets. you point out that often the second half can be very, very different than the first half. the first half has produced risk on levels. what do we need to be cautious about in the second half? >> in the asset markets, it's very clear that markets have been driven by valuation and, therefore, by liquidity.
so that means the -- of the asset market is becoming a liquidity issue. because the u.s. dollar is reseven kurptdsy number one. because of that, it is global liquidity here. and if you are getting into a stage where the fed is prospelling for a rate hike, then i think that it has an impact on global liquidity, as well, and that may as well have an impact on global volatility. we are currently in an environment why volatility is at record low levels. i think when bond yields are going higher, you will not be able to keep this very low level of volatility. that is a game changer for many currencies. when you want example, if you look at the yield differential between the australian dollars and the u.s. dollar, what you see there is the differential has moved now to levels which we
have seen in oldest last year. at that time, the australian dollar was trading at the 89. now it is trading at 93.5. and the different between that is because of very low volatility pushing people in the carry trade, getting them involved there where they think the yields pick up to make. but this story is clearly related to the interpretation of volatility. >> that is a great example to give us. thank you very much for joining us, hans. also, war and unrest in egypt. a series of bombings and protests marks the anniversary of the ousting of mohammed morsi. authorities arrested nearly 200 people. supporters of the president caused for a mass protest a year after he was ousted. hadley, i want to the talk about the economy, but there's probably not point until we
establish how it is in egypt right now. >> we've seen massive unrest in egypt and we've seen the economy take a major, major hit. even today, investors -- there is more confidence obviously and there's still a lot of uncertainty for investors. what you're seeing right now is a gulf country pumping into billions into that economy. and i had one former prime minister of egypt tell me the egyptian people, they're like children. that was his explanation for why a strong man, for example, is going to give confidence to investors. >> what's turned out to be unusual, though, the new president has been calling for egypt to tighten itself. but when you have an economy sliding because of all the instability we've been talking about wrb why would aus tailty on top of this be good for the egyptian economy? >> it's something they have to
do. whether you're talking to egyptian business men or people on the street, everyone knows there's something very wrong with the system where a billionaire can get the same subsidies as the guy using fuel just to make ens meet just to cook in the street. so there's a massive problem with that and everyone is aware of it. one thing they haven't done, they're going to have all of these subsidy reductions. basically, they spend a fifth of their budget every year with subsidies and creating this false economy. the problem is that they haven't even set a date yet. the only explanation for that could be that they are worried about the reaction in the street. >> when you point out to us the saudis and uae are winning support in egypt, what other factors are they looking at if they intend to get a decent return on their investment? >> the fundamentals are still there. you still have this ability for
tourism to be a major attraction. so tourism can play a major role in getting this country back on track. they need egypt to be stable. they need a strong government in egypt. for them, this is a win again. they feel, however, you're still going to get rumblings. king abdullah was there three weeks ago speaking to the president of egypt. we can't always be picking up the pieces in egypt. they're trying to get the state run government involved to build the biggest malls in the region. everyone knows they can't do it for the long haul, but they're very hopeful that this new president can get things under control in the next couple of years. so it's just going to be timing. >> hadley, we've got extended programming today, so plenty
time to talk and how that will play to the country's fortune. thank you very much for joining us today. so it's the first round of quarterfinal matches in the world cup today. brazil and colombia meet. colombia has impressed in the early stages while brazil at times has looked vulnerable. if the host nation wins, it will be a record sixth time. and france plays germany. at that event, the german striker hit so hard it knocked
him out. it must be time to turn to the world cup oracle for guidance. suggesting victory for the team from france. how much stock do you put in that? get in touch. some of the world's biggest companies will allow top ten pains for big events, such as the world cup. but with controversy surrounding the world tournament, some of the most recognizable brand ambassadors, one of the world cup sponsors was asked what he really brings to his band. >> it's enormous. when you believe that we produce 36,000 watches for the world, which is nothing. and we are present in 80 countries. so you see a few hundred watches
in the country, which is nothing. and we are present in the world cup, which will be seen 40 billion times. >> does that change the way that you think about specificity? is there part of you that thinks maybe we should spent a little bit more than 36,000? >> that is what we will not do. everybody in every slum, every little boy knows the rally. they still produce 7,000 cars. and if our awareness increases, and it does thanks to the world cup, maybe we do 38,000 or 37,500. you have to keep the demand strong, but let people wait and don't make it accessible to everybody immediately.
in the past you said something like you must always keep the customer hungry and frustrated. >> we always want what we cannot get. we want somehow what money cannot buy. that's the rule. that's likely. when you get something which money cannot buy. this is a lodge heical behavior for customer and that is why we keep our market short, but not too much because then you lose the customer. the customer is not passion forever. he's ready to wait. so there is a balance which you have to feel. >> i was looking at one of the watches made especially for the world cup and wondering what is necessary to be in a proper
sports watch, as it were, a watch worn by one of the players. like is there a recipe? a 12-hour display shadowed by a 60 minute measure of time which captures half the length of a football match which is 40 memberships. then you have the yellow and the green colors, the brazil hosting country's colors. is there real success for a player's watch? >> i think the recipe is to make people dream. the recipe is to create emotions. the recipe is to please the eyes. the recipe is beauty. now, do you really need such a watch for football? i would say no because you can have an electronic watch with
the rally starts here. european markets open in the red despite gains on wall street. and asian stocks hit a thre three-year number. austrian lenders erste warns on hungary and romania. a european tax ban goes out to amazon. eu officials have demanded luxembourg hand over documents regarding the online giant's tax affairs. as americans celebrate fourth of july, will scotland get its own independent day? george galloway 75 days ahead of the crucial referendum. european markets have been trading water in session this morning, just drifting into the red. you can see the state of play
have been changed too much from our last check. but u.s. markets out of action today for fourth of july. a lot of the action was staggered. more than the market expected, 288,000 jobs were created. in italy, 2.8% below the charts there. on some of the other safe havens, fairley low levels, too. 2.57% on gilts. foreign markets are noticed an elevation in dollar trade in the past 24 hours and that continues to be the case. doctoral/yen levels is 102 is the handle on the charts this morning. euro/dollar, under pressure. sterling back trablg tracking, as well.
the australian dollar has been pucking the trend, jumping to 93 up 0.1%. america may be celebrating its independence today, but in a few days, scotland will be voting whether it will become independent. >> we are stronger and more prosperous together. other countries are on the rise, other people are challenging for jobs in our industry. what sense does it make at a time like that to start separating yourself off with different economic units? and i would argue that this is a powerful argument when things go badly and when things go well.
when the royal bank of scotland was in trouble, the whole united kingdom could stand behind that bank and secure it foreour future and make sure our economy wasn't threatened. >> the argument put forward there by david cameron, joining us now is george galloway. he joins us in studio. nice to see you. >> thank you. >> traditionally, you haven't been a big fan of the conservatives or david cameron. >> you're thinking here i am following up for an interview regarding david cameron. my reasons for wanting to say no are very different from his. i am interested in the well being of the working people. and i believe that working people on both sides of the border will be better, certainly reduced if this comes into being. it will be a waste of the bottom. this is a business channel. you know about these things, a waste of the bottom, cutting,
costs, expenditure and regulation and that's not in the interest. do you see any -- do you have any compassion for the view that he's putting forward? do you think there is an argument that we will see a nation that is worse off despite -- >> i don't think in terms of nations. nations don't really mean very much to me. i'm interested in the working people and their well being. and the working people in england and scotland will be reduced if we divide. this is a small island of english-speaking people that's been together as one state for 300 years. it's done some terrible things as a state, but some very, very great things, indeed, the greatest without with we'd be having this conversation in german. it seems to me a great pity to
tear it asunder in the interest of no one that i can see except the petty nationalist politicians. the good news is, the argument is going our way and i think we're going to win a resounding victory. >> in the past, you've been quoted saying scotland would not get the pound. why do you think the sterling wouldn't be the natural currency? >> well, all the leaders of the three main parties who considerably could form a government have said there would be no use of the scottish pound. i've been divorced. you might give the departing party the cds, the dvds, the dog, maybe even the car, but you're never going to give them the joint credit card. and that would be the equivalent. it would be scotland walking out the door and england continuing to let it use joint credit card.
they would have power over it but no responsibility to it. that is not going to happen. i think they may regret that now. so, what, we're going to invent our own currency, indent the schilling? we're very candid about money, are up for a gamble in september. bringing into being a new country that doesn't even have a currency. >> there hasn't been a lot of support in brussels. in fact, many members of parliament are very much against the type of action that's taking place. so the why do you think it is the case they won't stay in
scotland? >> that depends what you mean by riches. you'll still be in your private in 2050. and not much people are going to mortgage their children's future on a commodity that's going to be finished in 2015. they will be 5,000 pounds ahead, except it won't be pounds. oil has been as low as $8 a barrel. not many sensible people would gamble on an economy entirely based on a commodity that's about to run out and whose price simply cannot be calculated.
you've been very vocal about iraq and the invasion that took place. now we're seeing extremism across the middle east. we've had unrest in iraq with the growth for momentum behind isis. what is the right strategy now? >> well, i told you so and i told them so. and everything that i told them came to pass, except it's worse even than i predicted. so it's no good asking me what should be done now. nothing can be done now. it's entirely destroyed. iraq no longer effectively exists as a country. and i promise you, western politicians and the journalists who geared them on and the broadcasters who geared them on will all rue the day they went down this path. so don't ask me what can be done. nothing can be done.
>> there is extremism growing in this country alone. you have authorities now trying to deal with many people in the training camps in countries across the middle east. the problems seem to be brought back tout uk. >> recently, i was.trapped in a lift with me. he's been wrong all his life, but i never knew he had been insane. the policy of encouraging these fanatics to join the war on the side of the fanatics in syria was literally snet. the people will use the skills that they acquired there and bring it back here and start blowing up us. so this policy of invading and occupying other people's countries, my enemy's enemy is my friend, frankenstein
monsters, all of them. this is insanity. if you're a trarl jurisprudencist, you ask incisive questions. i wish sharp and incisive journalists had subjected political leaders to these questions before we did all this. so don't come after me how we can defend ourselves against them. i told you not to do it, that's what i say. >> thank you so much for song by today. still to come on this show, starting up your business idea in some exotic locations.
officials have set their sites on amazon's tax affairs. they've asked for details on the tax operations in the country. that's according to the ft. the eu commission wants to check whether the company's corporate tax decisions complied with state aid rules. thierry peugeot has stepped down for the company. this seems to be the consensus this was the right call for the carmaker. why this departure from the board? >> it's no secret that he was opposed to the alliance. when he was chairman, he tried to black the plan against the french economic minister. in march, he stepped down from
the chairman position after the chinese carmaker under french states both took a 14% stake in the company. when the make shareholder faced a significant dilution, he remained chairman of the board after that partial takeover, but he was not supposed to openly decide strategy, and that's xx lit what he did. on june 23rd, he criticized involvement of the french government and the defender of the free enterprise. when the state buys into a country, other options were available. the reaction of the board was rather chilly and will be replaced by another member of the peugeot family. his sister will take his seat at
the board. the market reaction, there's no major reaction to be honest today. the peugeot shares had a strong week after the company announced this week it would open a fourth factory in china. the market is more tied to that than this news. >> stephane, where is your jacket? it looks like casual friday. >> casual friday, indeed. my producer was just telling me, where is the jacket? >> i have another man here doing casual friday, as well. perhaps you want to go to the -- and can't take the risk. our next guest wants to help high flyers start up their dreams. he's not wearing a jacket or a tie. this tells the story, doesn't it? you're wearing a t-shirt on the friday, you're here in the city
talking about your latest venture, escape the city. what exactly does this business do? >> yes. i apologize for my dress down. the business helps people escape corporate jobs and do something different with their lives. it's all about finding cool jobs, a cool alternative to being in a corporate environment. >> how do you make money with this? a lot of people say i can get you a job here. but to leave your corporate job which has a guaranteed income and a high amount of salary, paying off a mortgage or planning ahead for the future, how do you convince people to step away from the security of that and chase a deem? >> it's not that hard. when people go through -- there is this gravy train of people going from university to a good, corporate job. then they get to a point where they're like, is this it? and they see their boss and they think, i don't want to be like my boss or four or five years doing the road they find the
work is not fulfilling. people are very willing to take a pay cut and find their fulfillment. >> you want to speak to generation y, those who prefer quality of life over the hard and fast rules of the work ethic, which many like the generation x, the baby boomer generation seem to lead buyers. is there a specific demographic that you've targeted? >> i think it's easier to move and transition when you're younger. so anywhere between 21, 22 to 35. it's much easier. obviously, it's much harder when you've got tendencies and mortgages and you're used to that type of lifestyle. so it is harder. but there is a generational thing. definitely. i think our generation in the generation i got is much more inspirational, but they're aware of what is available to them. and i think the idea, the notion of having one job for life like
my parents' generation is now over. and most people are thinking can except to transaction to four or five careers in their life. >> when you say careers, you mean a totally different thing they're doing, not just changing jobs. >> yes. that notion of one one locational job is going to go away. >> at the risk of getting my boss to try and convince me to step away from this job, what would you offer me? >> a crew job. >> so i'm not in the category. someone else who is wearing a suit, board gears from meeting to meeting, looking at documentation and saying there has to be more to life than that, what type of alternative with you want for that person? >> we do two things. those opportunities, entrepreneurial, working for an ngo charity or a cool company or
watching abroad more like a vacation. the other thing we're trying to get people to do is inspire them. we've been finding a lot in the last few years so many people are setting up their own businesses, but they need help and guidance to help through that process. so we serve these courses to teach everyone what we wished we had known when we started escape the city. >> go and enjoy the sunshine. i'm just going to roll up my sleeves and plow through the next couple hours of work here. thank you so much, co-founder escape the city. hurricane arthur has become the earliest hurricane in a season to hit north carolina since records began in 1851. the now category 2 storm made landfall last night. the governor of north carolina has declared a state of emergency in 25 counties along
the state's coast, affecting many fourth of july celebrations. mike joins us from the weather channel and sends this report from the west and north carolina coast. >> the northern eye wall hurricane arthur now hitting in north carolina on the outer banks. it sticks out into the atlantic. and all night thursday night and now into early friday morning, we've seen the waves increasing and the water coming up. although the tide is actually going out. it can't because of these very strong winds. we've had kufts south of here as high as 100 miles per hour. this is the earliest recorded landfall of a hurricane in north carolina going back to 1851. we've got a lot of sand. there's a big drop off here of about three plus feet. that's all going out into the atlantic. what we call beach ee rose. that is the big issue. a lot of heavy rain here. once the storm goes by in a few hours, we'll have winds coming around from the west-northwest. that's going to push the water
from the sound, the big bodies of water to our west to the sound side, what we call sound side flooding. up here, we have hundreds of thousands of tourists here for the july fourth american independence day. most of the people stayed put. and certainly by noon, it's going to be much, much better. we'll have the sun out later on this afternoon and the weekend here is just going to be tremendous. there will be some cleanup, there will be some minor damage, i think. but so far, so good. as far as we can see up and down the coast, the power at least here in kill devil hills is still on. hurricane season officially june 1st through november 30th. we'll see how the rest of the season fares here in the united states. back to you in london. it's been a bittersweet run for futures after taking a plunge in may. prices recovered last month. and in u.s. trade yesterday
reached a three-year high. demand for cocoa butter helped the powdered counterpart, ended the day lower on profit taking ahead of the weekend. joining us now, chris from mccoy group. if cocoa price res going up, that means my chocolate is going to be more expensive or there will be substitution. >> yes, definitely. i think we've seen a rise in cocoa prices. there's a structural story that sits in play there. we have the fact that there's lots of competition. and also i think the risk that's building up for cocoa is what we're seeing as building a risk of dry parts of west africa and potentially limiting production. and i think that's the reaction to prices today. putting in that risk. >> you've been talking about the decent pickings in the soft commodities markets for a couple of weeks now. but the warning that the bear
market could be here in a couple of years. so the good time is over in terms of commodities. >> agriculture commodity res naturally cyclical. pretty much they're the biggest driver in most of my job is monitoring weather and weather is naturally erratic. and i think like we talked about the cocoa story, the el nino and the dryness there, we're siegel nino risks with sugar. but with every weather events, there's positives and negatives. certainly the positive is cooler than normal conditions. and the reaction to that now, near perfect weather conditions creating a great environment, increasing a huge crop to the u.s. this year. >> we'll have to put you in contact with our weather man after this when he's finished with coastal cover aemg. you're heading off to the midwest soon. you make the point to us that farmers have the ability to expand margins. which seems extraordinary to me because when you speak to any of the major retailers, the super market giants, they're still facing the price with the
consumer, which means they have to extract as many costs as they can. it seems strange to hear. farmers seem to have the ability to reprice their products. >> i think the reality is the farm gate level from that side of the story, what you're having is there you get the volatility in the commodity. they're producing the natural resource. so in a bear environment which we're moving into, they're the ones that get the environment squeezed. in the market where we saw high corn prices in the last few years, farmers in the u.s. were making nearly 100% margin. whereas they have a fairley stable margin, these guys have an extremely volatile margin. >> a couple other factors here in the u.s. dollar, many people calling it higher. we saw a bit of a spike after the jobs report and the oil price has been a bit of an unusual one with the trade and insecurity across the middle east. how do you factor in these two traditional elements that often
drive the soft commodity price? >> i think they have a short-term impact. but the reality is most of the world's trade in agriculture is trading in dollars. so your consumer's price in dollars, not too much of a transition there. the oil price story did have an effect. which is helping drive more corn demand. but in reality, when we're producing as large a crop as we're seeing today, we can quite edly afford to have that demand. >> chris, thank you so much for joining us. still to come on the show, the ceo of india's largest ip service pryer tells us why he thinks the market will pick up momentum in the latter part of the year. that exclusive interview, coming up. up. jç)y
welcome to "worldwide exchange." i'm karen cho. these are your headlines from around the world. those rallies stops here. uk markets open in the red despite solid gains on wall street which found the dow above 17,000 points for the first time. asian stocks have reacted. erste bank has higher divisions in hungary and romania. the european tax man goes after amazon. a report suggests eu officials have demand luxembourg hand over
documents detailing the online retail giant's tax affairs. and as america celebrates fourth of july, will scotland be getting its own independence day? george galloway tells this program an independent sovereign could not take the pound. >> i've been divorced. you might give the departing posse the dvds, the dog, maybe even the cat, but you're never going to give them the joint credit card. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> thank you for joining us here on "worldwide exchange." here is how markets are shaping up across the board. we are very much on the move this morning. a pick of pop up reactions you think think due to the jobs
report, but european markets trading higher after the latest details from the ecb in thursday's poll session. so you can see the markets just looking lower. seems like the lack of action stateside is impacting markets. where we are seeing a much bigger slide now is in italy. the ftse mib tracking lower by just over 0.5%. some of the big movers out there influenced by the top corpse stories we're keeping watch on, erste bank cleansing after the austrian bank says it will book a loss for the year. erste blames profit it has to take. a disappointment. the performance of the bank is dragging down other austrian stocks, including fellow member raiffelsen. it says its remaining operations are doing well. still struggling to differentiate between the two
stocks. elsewhere, easy jet taking off as investors welcome the passenger numbers from the budget airline. the company reported a 10.1% jump in traffic. that means the firm carries 6.1 million passengers last month. asian market today, a bit of a pop to some of them in reaction to the jobs report. those 288,000 jobs created in the month and the unemployment rate sliding to 6.1%. awaiting the japanese currency versus the u.s. dollar, shanghai going in its own direction today, stocks up 0.2%. hong kong drifting. on bond markets, yields across the board. a bit of a tick higher on the u.s. treasury aside the short end of the curve. but we've got yields close to 1.25% in germany. france just above the 1.5% market. we stabilized easily, but 2.8%
is where we are trading today in italy and 2.75% on gilt. the initial move higher on the u.s. dollar not enough to satisfy some of the dollar bulls. this morning, the euro is softening up a bit. the exception has been the australian dollar. but it has been higher than this left, so perhaps some of those lows. so 93.5 the current level. move on to yesterday's market action. this is a recap in case you missed it or you want to enjoy the numbers yet again. 17,000 on the dow, extraordinary to see that level. and you've got seven months since the last 16,000. the s&p also at a fresh record, 1985. and the nasdaq finished up 0.16%. josh lipton sent us this report on the trading day on wall street.
>> another record day for the markets. the dow closing by 17,000 for the first time. ending the day up 92 points. the s&p rising nearly 11 points, closing at a record high of 1985 and the nasdaq up to 4485. the move higher is fueled by another round of big gains in the jobs market. the u.s. economy adding 248,000 jobs in june. making it the best stretch of job creation since the 1990s. walgreen's sales rising sharply. the pharmacy chain reported prescription drugs up more than 13% last month. that drove their stocks forward today up 1.3%. and americans are hitting the road for the fourth of july. more than 30 million people in the u.s. expected to drive more than 50 miles this weekend. aaa saying one gallon of unleaded gasoline costs an average of 3.67, the highest it's been on july fourth since 2008.
that's the action from the u.s. market. back to you. >> tim hartson, the ceo at harris capital association. tim, at these levels, do the bulls finally feel like there is traction in the markets and a bit of activity. but from here, in the past, i mentioned we saw 16,000 not that many months ago. it's now at 17,000. does that mean 18,000 for next time or are we getting too carried away? >> are the bears being converted inspect over the last month or so, there are a few bears out there, a few people saying hang on, we're the next driver coming through. that to me from a behavior point of view is quite good news. when i look at valuation and momentum, i still feel pretty good about the u.s. and the uk and parts of europe in particular. we're looking at valuations on markets which appear where we are in this stage of the cycle when you look at historical president. when you look at discount rates, you look at hurdle rates, what i
could be earning from putting my money in the bank, the bond markets doing nothing. they don't give tkly high turlgdz rates to me. when i look at where corporate rates are moving and afterwards we have a dull start in terms of corporate earnings, i see things moving better. and i think the earnings story, which is an 8%, 9% growth story in the u.s., i think the risk is now on the up side there. put that and together, i feel pretty confident. >> valuations today have an assumption baked in and that is earnings in the second quarter will reflect this turn in the cycle. there's expectations abdomen and what if we don't see the earnings cup match up in the second quarter? >> it would b -- having said that, we're coming up on the third quarter which means
particularly in the u.s. you saw the macro data. very weather impacted. that's through to the corporate story. and i think corporates are coming off of that. when you look at some of the retail numbers that have come out, both in the u.s. and europe, there's catch up coming through there. unless there's a big stocking and destock can effect, and i don't think there is across the g-7 economies right now, i think you would see an increase of move coming through. that relative to the summer months, things tend to be pretty good in the summer months. companies moving on. so in my view, yes, it's not what we're discounting. there will always be disappointments. we saw it in the uk yesterday. it's always the micro. there are always disappointments. but on the macro, i think the momentum is positive. >> can you give us a quick one on the trading ideas you've got? how the play the u.s. markets specifically? >> cycality.
banks are now rebuilding balance sheets. how banks get their capital core tier 1s up to the right level. earnings are coming through. how you value banks price begins to expand. it's it's still pretty depressed levels there. >> we're getting very pushed on time, but i have to ask you about some of your european exposures. you basically have a lot on a qe trade. as you look at the latest comments out from the bundes bank and how he views this versus what draghi has been saying, to me it looks likes a disconnect despite the fact that both players are saying, no, no, there is union, there is a concerted approach. it doesn't seem as if qe is going to happen any time soon for me if at all. >> that's how you manage expectations, but we actually do. germany is 30% of the eurozone economy. and germany has a progressive economy where it's moving forward. 70% of the european economy, a
euro area economy is still very much dragging along. france, itsly being prime case necessary point. and i think we still need to see how we jump start those markets. when i look, we've got examples now of how qe has affected both the u.s. and the uk markets over the last three years. it's not free money, but it's a monetary expansion, a monetary policy expansion which gets people working and working. when equities to me still carry a yield, little known expected return on capital which you can't replicate elsewhere, i think that leaves them as the asset class in europe which would be the assest classes of choice. >> thank you very much for joining us, tim harris. let me delve into the flashes across the wire. poland is done with large privatizations, according to treasury officials. poland is likely to miss
privatization revenue target in 2014. so it's saying to the markets we're not going to achieve the current level of selling these as etss, putting the sales on them and raising cash for warsaw. poland expects its decision this year on a tie up with the warsaw of the inner exchanges. so more consolidation in the region is something that's being pushed for by many of the regulators trying to increase the liquidity in some of these markets. time for a quick drink break now as americans gear up to celebrate the fourth of july weekend. they may have to fork out extra cash for beer. prices are on the up thanks to a kraft brewery craze in the region. >> a little bit of citrus and pine in there, as well. >> these are heady times for america's crap brewers. >> it's a great time. i've got a job job. i love what i do. >> everedgerton is a brew
master. his only problem? as craft gears have gained in popularity, there is a shortage of hopps. >> our brokers are telling us we need to contract out for many years ahead of time. we're contracted out rote now three years ahead. >> blake crosby is a fifth generation ropps grower in oregon. as prices have doubled, he's doubled acreage. and he's spending millions to expand into things like a machine which drys and compresses hopps into tallettes. >> all in all, right now, hopps are probably at the highest they've been in ten years and we're at a place where growers can finally afford to make expansions. >> crosby's cousin ben smith says if he could sell more
hopps, he would. >> i am completely sold out for the next three years. >> with so many interviewers needing a -- a hopps bubble that pops. >> we've done a very good market in the year past. we'll have to play it by ear and lock in some good prices while we can. >> jane wells, cnbc business news, woodburn, oregon. still to come on the show, is the tax man knocking on amazon's door? all the latest on the reports.
tess are your headlines today. rally? what rally? european markets stutter despite gains in the u.s. and asia. taxing times for amazon as reports the online tax man is coming off the retail giant. and hurricane arthur intensifies in north carolina. a look now at the other top stories today. eu officials are turned their
sights on amazon tax affairs. according to the financial times, they're looking the a tax issues in the cup. the eu commission reportedly wants to check whether the company's corporate tax decisions comply with state aid rules. the chairman at barclay's has warned against a radical overhaul of the foreign exchange market saying the focus should be on ragz standards. fine tuning with leaders not heavy regulation. his comments come as global regulators investigate the currency markets for alleged rigging by banks. parkly's has set up a new compliance academy to improve the training of its current staff. >> it is the first round of the quarterfinal matches in the world cup today. brazil and colombia meet in this
stage of the tournament. colombia has impressed. should brazil win the world cup, it would be a record sixth time. and more interesting for our european audience, following germany takes on france in the quarterfinals this season. the two teams have a history of bad blood dataing back to 1982 when the world cup was held in spain. in that event, the german -- hit the strike were a challenge so hard it knocked him out. but turning into the oracle, let's look for guide yns on the likely winner this year. i'm not sure how much stock to put into this swimming turtle. but brazil's fortune telling turtle headed straight for a fish hanging from a french flag. there you go. suggesting that victory will be for the french tonight. still to come on this show,
so why are we so obsessed with turbo? because there's nothing more exhilarating than a powerful ride. and you can get that in places you might not expect. like the passat. and also in the fun-to-drive jetta. in fact, volkswagen has sold more turbos than any other brand over the last ten years. that is a lot of turbo. hurry in and you can get a $1,000 turbocharged reward card when you lease a new 2014 passat s for $219 a month.
in a statement today, china's premier league says the country's growth in the second quarter has picked up from the first part of the year. however, he warns that difficulties cannot be overlooked and the government will use targeted measures to keep growth within a reasonable range. meanwhile, chinese president xi jinping has been in south korea since thursday for a summit marking his first visit to the country since taking office last year. >> chinese president xi jinping is in town and held talks with the south korean president yesterday. so far, it looks like the talks are going well. on the north korea front, both presidents have strong opposition to a possible nuclear test by north korea and any nuclear developments on the korean peninsula. in a news conference, it was
says president xi's visit was a -- and just as important, talks of trade and business discussions were in the focus. the free trade agreement between china and korea were discussed in detail, as well. these talks have been going on for more than two years. china and korea have agreed to work towards closing a free trade deal within this year. they have worked to set up a direct trading link for the korean yuan and the korean won. let's talk more about the outlook for asia. the president of the asian development bank is right here in the studio with us. nice to see you today. let's take a look at one of the missing links in the global picture want we've had some strong jobs reports out of the states. extremely happy with the situation, but one of the concerns that many people have had is that you haven't seen a
strong growth across the year. >> i think there is too much discussion about the slowdown of china and the use of -- but it has been doing really, really well and concept strong growth on the crisis. and we are now thinking including central asia would keep the growth rate of about 6% and china with a key growth rate of mid to 7%. he already mentioned 10.74 plan including more investment. and avoiding more red tape in countries. we will have a better concept for the asian countries. and essentially because this countries, including the euro, uk and gentleman plan.
if we take china, for instance, there's still a lot of negati negativity in it. when do exports start recovering? or are we now seeing a fundamental change in the chinese economy? >> it is true that the chinese economy has grown after the crisis, more and more dependant on the domestic demand, including investment and conception. but these are the euro and u.s. and also the -- it is clear that they exported, also. and there is no question about it. >> what do you think is the biggest challenge facing the region? is it the debt, is it rebalancing? is it tapering? am i hitting on any new topics? >> the challenge is further, they continue to pass through, including fighting for inflation
or the fiscal deficit and others. they know some countries in asia and also, too, whether they can continue some set of -- or not. and to maintain the open trade with you. those are the issues. and also there is a question about -- in thailand, for instance. i hope they can resolve this herbs sooner rather than later. some security concerns. so i think the challenge is more about the -- the geopolitical issues. >> let me ask you about monetary policy. there has been a lot of discussion about what the fed is doing, what the ecb is doing, and the message has been policy. how much room do the angels have at the moment?
>> i think he's keep a resistance. it won't help even with this type of issue in berlin. we're going to rate interest rates soon. but overall, the asian growth is not just based on the monetary easing. if a certain cooldown monetary, i don't think it would make -- in asia. >> very much appreciate your time. thank you for joining us. the president of the asian development bank with us. ahead, still to come, we are in the arthur development. stay tuned. stay tuned.
welcome to "worldwide exchange." i'm karen cho. these are your headlines from around the world. the rally stops here. european markets open in the red despite solid gains on wall street which closed the dow above 17,000 points for the first time. and asian stocks hit a three-year peak in trade. erste flagging up higher
provisions in hungary and romania. former prime minister spokesman andy coulson is sentenced to 18 months in jail over the phone hacking conspiracy. and as americans celebrate the fourth of july, will scotland be getting its own independence day? george galloway tells this program an independent scotland could not take the pound. >> as in divorce, you might give the departing party the tv, the dvds, the dog, maybe even the car, but you're never going to give them the joint credit card. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> let's delve into the breaking news. the former media liaison, the media chooe for the british prime minister david cameron has been sent to jail for 18 months
today. this is for being complicit in phone hacking by journalists at the rupert murdoch tabloid "news of the world." he was convicted last week on conspiracy to illegally intercept voice mails on the people's phone. so today, the conviction has been handed down from a court. 18 months is the amount of time that he will depend behind bars. this is just one component of the charges that coulson is facing. so there may be more time behind bars, depending on the outcome of the allegations lobbied against coulson. but, of course, negative connotations here for the british prime minister who previously employed andy coulson, as well. but we will continue to follow the events happening across the road from us. let's track some of the action on european markets today.
it has been a weaker picture across the board. but it has been a stable one. if there's a take away message. friday activity as wall street is not open for trade today since the activity here in london. taken the dax off the pink shift, as well. asian markets, a little patchy. there is some upside, though, for the nikkei. it was stronger on the back of weakness in the japanese currencies. the dollar took off in the past 24 hours on the jobs report. australia going 0.6% higher. the shanghai market has been weaker in session today. if you want to look at a better picture, this is the city's stateside. we saw 17,000 breached on the dow after the jobs report showed 288,000 new jobs created. the unemployment rate ticking down to 6.1%.
so that was the catalyst to inspire these markets. the nasdaq getting to close records, 4,485. the big question is how do you make money on these markets now? as we trade around these fresh records. this is what experts have been telling us this morning. >> very strong -- in order for the market to start being long the u.s. and yen. but i think yesterday we got it. the labor market was very strong no matter how you see. so looking forward, throwing your debt at the markets, my need to establish this long u.s. trade. >> the market at the moment has been focusing on the yeel. but there are a lot of risks in this high dividend yield. these companies have huge
financial leverage. what we do, actually, it's very interesting. another lap between high dividend yield stance and companies that on a moment basis, there's nothing to unplug. >> no. the dollars is listed as good exposure to those. i think the idea that cash is dead money, you can actually go and earn a reasonable yield if you're in the right game. the latest on hurricane arthur is that it is moving offshore of the outer banks of north carolina and will pass southeast of cape cod tonight. hurricane arthur became the earliest hurricane in a season to hit north carolina sips records began in 1851. the weather channel's mike seidel sent this report from a
rather wet and windy kill devil hill on the north carolina coast. >> the northern eye wall hurricane arthur now hitting in north carolina on the outer banks. it sticks out into the atlantic. and all night thursday night and now into early friday morning, we've seen the waves increasing and the water coming up. although the tide is actually going out. it can't because of these very strong winds. we've had gusts south of here as high as 100 miles per hour. this is the earliest recorded landfall of a hurricane in north carolina going back to 1851. we've lost a lot of sand. there's a big drop off here of about three plus feet. that's all going out into the atlantic. what we call beach erosion. that is the big issue. a lot of heavy rain here. once the storm goes by in a few hours, we'll have winds coming around from the west-northwest. that's going to push the water from the sound, the big bodies of water to our west to the sound side, what we call sound side flooding. up here, we have hundreds of thousands of tourists here for
the july fourth american independence day. most of the people stayed put. and certainly by noon, it's going to be much, much better. we'll have the sun out later on this afternoon and the weekend here is just going to be tremendous. there will be some cleanup, there will be some minor damage, i think. but so far, so good. as far as we can see up and down the coast, the power at least here in kill devil hills is still on. hurricane season officially june 1st through november 30th. we'll see how the rest of the season fares here in the united states. back to you in london. >> let's take a look at the other top stories today. japanese electronicsmaker sharp is considering exiting the european market for home appliances. according to reports, they're in talks over licensing taiwanese and turkish firms to make and sell its products there. sharp has said it's looking at
options to restructure its european bits, but nothing has been finalized. shares of htc soared in take pay today. this after these struggling numbers that slightly beat forecasts. the launch of new flapship and mid range phones, cost cutting, and assets helped htc get back in the black the second quarter. some of the world's biggest companies roll out their top ten campaigns for global events such as the world cup. louisa bojesen caught up to one of the world cup sponsors and asked him what it brings to his event. >> it's enormous. when you believe that we produce 36,000 watches for the world, which is nothing. and we are present in 80
countries. so you see a few hundred watches in the country, which is nothing. and we are present in the world cup, which will be seen 40 billion times. >> does that change the way that you think about specificity? is there part of you that thinks maybe we should spent a little bit more than 36,000? >> that is what we will not do. everybody in every slum, every little boy knows ferrari. they have an awareness that is inedib inedible. they still produce 7,000 cars. and if our awareness increases, and it does thanks to the world cup, maybe we do 38,000 or 37,500. you have to keep the demand strong, but let people wait and don't make it accessible to everybody immediately.
in the past you said something like you must always keep the customer hungry and frustrated. >> we always want what we cannot get. we want somehow what money cannot buy. that's the rule. that's likely. when you get something which money cannot buy. this is a logical behavior for customer and that is why we keep our market short, but not too much because then you lose the customer. the customer is not passion forever. he's ready to wait. so there is a balance which you have to feel. >> i was looking at one of the watches made especially for the
world cup and wondering what is necessary to be in a proper sports watch, as it were, a watch worn by one of the players. like is there a recipe? a 12-hour display shadowed by a 60 minute measure of time which captures half the length of a football match which is 40 memberships. then you have the yellow and the green colors, the brazil hosting country's colors. is there real success for a player's watch? >> i think the recipe is to make people dream. the recipe is to create emotions. the recipe is to please the eyes. the recipe is beauty. now, do you really need such a watch for football? i would say no because you can have an electronic watch with
digital indications, which is much more easy to read. >> you can watch the full 30 minutes of that interview on cnbc.com. still to come on this show, it's a regular criticism from sme. we just can't get bank funding. after the break, we talk to a group hoping to change the wall small business hits you alone. . ♪ ♪ during the cadillac summer's best event, lease this all new 2014 cts for around $459 a month or purchase with 0% apr and make this the summer of style.
these are your headlines today. former media chief for uk prime minister andy coulson is sentenced to 18 months in jail. taxing time for amazon reports suggest the eu tax man is coming off the online retail giant. and hurricane arthur ruins independence day for part of the u.s. as the storm intensifies over north carolina. british prime minister david cameron's former media chief andy coulson has been sentenced to 18 months in jail, this after he was found guilty in a trial over phone hacking at the paper he used to edit, the news of the world. coulson was convicted last week of conspiracy to illegally
intercept mobiles on phones. last month, santander signed a r appear agreement with referrals. as par of your relationship, customers will find. there can be new avenues for small business toes access funding. is it working and are you picking up anything from the arrangement? >> maybe i can describe a little bit of what that funding cycle is. funding cycle is the leading global marketplace that allows investors to lend money directly to small businesses. we've lent over $500 million. nearly half of that has come this year. and what this allows us to do is, you know, awareness of
alternative finance like ours is still very low. what whoep will do is bridge up the main issues. >> small and medium sized enterprises traditionally have gone into banks looking for funds. that has dashed many of their hopes for the future. so they don't typically go to forms of funding circle and even crowd funding for instance another type of funding available to the markets. so what sort of shift have you seen in the numbers coming through the door? >> in terms of this particular deal with the bank, what we find is about a third of the businesses that borrow to us wouldn't have been able to access finance elsewhere. so they've probably gone to the bank, they haven't been able to get a loan. so in the case of those customers, you know, the santander referring them to us helped those access to finance
their needs to grow and expand. >> what about here, we know the criteria for some banks is still to tough. is your criteria, the hurdle, the barrier a lot he is than the major banks. >> we have different cry tier dwra and more data from the understand. just have different sets of the criteria. they may in some cases have just want to lend to a particular customer. we see stuff like that all the time, as well. >> people are coming through the door. who is, in fact, the real person bhienld this topic that we're talking about? >> it completely varies. we've got all sorts of businesses from manufacturing
firms, restaurants, jet packmakers, you know, pretty much any business you can think of has now come through funding circles. we don't really skew any way. i think a lot of people think that it's mostly start-upes. we don't actually lend start-ups. these are typically established businesses that just want an alternative to their bank or a faster way of gaining access to money. >> let me ask you quickly about the other side. you point out an average of 6.1% after fees and losses. that's a return on their investment. that is higher, of course, than what you can get in any cash of the markets. some people still perceive as semi high risks. you're willing investors to contribute cash to funding a circle. >> so we have over 30,000 individuals that actively lend to the platform. eight local councils. the uk deposit is lendling 60 million to us. universities, didn't you institutional investors. it's aed bro range. what we found is we have a
rigorous investment credit process, we use 589 of data, we have every loan looked at manually by a predecessor. every investor has a lend and 70% are earning between 6% and 10% a year. so this is actually i would say relatively low if you diversify in the portfolio. >> appreciate the conversation. thanks for joining us today. liberty shares has been become the latest high profile. are horses really a winning investment inspect more about that, next.
bloom enthrall has joined thoroughbred racing. he is now part-owner of two race horses, joining other celebrity investors such as liz hurley and alex ferguson. our next guest has set up a horse club which allows investors to buy into horses valued up to 100,000 pounds. no horses in the studio, but you've had a strong track record and you got started by investing cheaper. tell me how your start began. >> my background in my family was involved in horse racing. my parents used to train race horses. i understand the business from that point of view. my background is actually more of legality. so currently i've got a small public and restaurant based in chelsea in london. out of that, we started a racing club called the sydney arms racing club and i founded that with a friend of mine who is a
stock broker and has his own firm. so there was a financial background and a horse -- thing out of that and we wanted to create a rey racing club. started with smaller horses, 15,000 to 20,000 pounds and maybe two or three people involved in each horse. we've had phenomenal success in every horse we've bought. on that, we think it's time to rebrand it, start buying more interesting horses. >> when you look at the purchase price of 100,000, there's no guarantee that you start to win any better races, sometimes no greater return. why the decision when you're being so successful in the smaller end of the market? >> we think you can get hold of that at that price range. there's a certain limitation to
the horse at the 20,000 pound mark. you're limited and you go further up the line as to what the price of the horse is when it's bought as a yearling. so we think that opens up the book to slightly better races and a better bred horse, basically. >> these numbers, what is the here because people are basically being told a lot of statistics, that you get i think $1 for every ten you invest. how much are people giving up initially? >> i'll get something back to what you mentioned earlier. statistically, it isn't a good investment. one in five go ahead and actually win a race. so we feel that with our previous track record, with the racing club that we've had we've done very well. and we think with the people that we've got can massively limit the risk of your investment by getting involved in this level. so the horses we had before was divide it up to 20 people.
the people involved said look, i'd rather spend more money and get a bigger chunk of it. so we're looking to chop it up in the rate of ten shares. it's going to be somewhere between the 8,000 to 15,000 pound mark per share. >> there is a history of investing race horses in my own family. typically it is nice to own half of a horse. but sometimes if something happens to that horse, lightning could hit the farm, it could jump on to the -- so much can go wrong. isn't it better to diversify your investment? >> we feel that, very much so. the opportunities is here. we feel that, yes, you can have half a horse with one person and not doing very well and you can have 15% of maybe six horses and you've got a much better chance of gains going forward. >> thank you so much.
coming up on this show, as the crisis in iraq shows no sign of easing, find out why george scalloway thinks nothing can be done to end the violence. the vi. like the passat. and also in the fun-to-drive jetta. in fact, volkswagen has sold more turbos than any other brand over the last ten years. that is a lot of turbo. hurry in and you can get a $1,000 turbocharged reward card when you lease a new 2014 passat s for $219 a month.
>> my name is jeff allen, and i'm back. it's a new season of the car chasers. all right! i buy, fix, and flip cars. this is a money-maker. >> sold! >> but i don't do it alone. i've got perry, a real artist when it comes to restoring cars. >> i think you should take these carburetors, just throw 'em outside. >> meg, my better half. she keeps all of our spending in check. >> we don't do cars to set bars. we do cars to make money. >> and eric. he builds, he wires, he repairs. >> i'm pretty sure this is legal. >> there's nothing this mad genius can't fix. >> she is purring. listen to that. >> my main competition is still my dad, the toughest negotiator i know.